Forex Technical Update
The 4H USD/JPY chart shows a market that is trading up at a declining channel resistance. The channel represents a bearish correction from 84.16 to 80.27. Note that the RSI has broken above 60 and is about to kiss 70. This shows a shift from the bearish momentum to at least sideways if not bullish momentum. For the current breakout attempt, there are some resistance factors just ahead, slightly above the channel. The 38.2% retracement level is 81.76.This is also the area of previous consolidation support during the end of March, and near the resistance pivot from April 10.
Clearing 82.00 would be a good sign of a strong breakout. Also, a throwback that respects the pivot area around 81.20 as support should help confirm the fact that USD/JPY has completed the corrective decline and is developing a bullish market. So, first target for a bearish attempt from the 81.75-82.00 area is 81.20. The bullish scenario would open up the 84.16 high.
If the market breaks below 81.00, then we should consider the market sideways if not back to bearish. A revisit of the 80.27 low would be the first scenario to the downside if the market fails to sustain a break above the channel.
Fan Yang CMT is the Chief Technical Strategist, trader, educator and a of the main contributors to FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.